v3.26.1
Income Tax
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Tax Income Tax
Our income tax benefit (expense) consisted of the following for the years ended December 31, 2025 and 2024 (in thousands):
December 31, 2025December 31, 2024
Current:
Federal$— $— 
State(1)43 
Foreign— — 
Total current$(1)$43 
Deferred:
Federal$— $— 
State— — 
Foreign— — 
Total deferred— — 
Total income tax benefit (expense):$(1)$43 
The Tax Cuts and Jobs Act imposed a limitation on a corporation’s ability to utilize federal net operating losses generated in taxable years beginning on or after January 1, 2018 to 80% of taxable income in a given year. Although net operating losses generated in taxable years beginning on or after January 1, 2018 are subject to this limitation, any net operating losses generated prior to such date may be utilized to offset 100% of federal tax income.
The Company’s effective tax rate for both 2025 and 2024 was 0% and differs from the statutory rate of 21% primarily as a result of our valuation allowance in both years, which fully offsets net deferred tax assets.
Net loss before income taxes for the years ended December 31, 2025 and 2024 was as follows (in thousands):
Loss before taxes20252024
Domestic$(11,768)$(7,912)
Foreign— — 
The following table presents the significant components of the Company’s deferred tax assets and liabilities (in thousands):
December 31, 2025December 31, 2024
Deferred tax assets:
Net operating loss carryforwards$45,962 $44,472 
Stock-based compensation1,124 1,124 
Right-of-Use Liability/Pre-ASC 842 Deferred Rent1,214 1,405 
Section 163(j) Limitation246 246 
Section 174 R&E Expenses2,566 1,768 
Accrued compensation1,976 244 
Other deferred tax assets177 165 
Gross deferred tax assets53,265 49,424 
Valuation allowance(51,898)(47,891)
Deferred tax assets, net of valuation allowance1,367 1,533 
Deferred tax liabilities:
Right-of-Use Asset(791)(912)
Prepaid expenses(411)(415)
Fixed Assets(154)(192)
Other deferred tax liabilities(11)(14)
Total deferred tax liabilities(1,367)(1,533)
Net deferred tax assets (liabilities):$— $— 
Management assesses all available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. On the basis of this evaluation, as of December 31, 2025, a valuation allowance of $51.9 million has been recorded as no deferred tax assets have been identified as more likely than not to be realized.
At December 31, 2025, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $161 million and $146 million, respectively, to offset future taxable income. If unused, a portion of the federal carryforwards will begin to expire in 2034.
As of December 31, 2025, the Company did not record any cumulative unrecognized tax benefits on its consolidated balance sheets.
The Company’s federal and state income tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue. The tax period for the taxable year ending December 31, 2022 and all tax periods following remain open to examination by the major taxing authorities in all jurisdictions where we are subject to taxation.
Tax Legislation Changes
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law, which makes permanent certain tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act, such as 100% bonus depreciation, and also restores or modifies other business tax rules, including domestic research or experimental cost expensing and the business interest expense limitation. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, but many are generally not effective until 2026. The Company is currently evaluating the potential impacts of the OBBBA; however, it is not expected to have a material impact on the Company’s condensed consolidated financial statements. As a result of the full valuation allowance as of December 31, 2025, the OBBBA did not have an impact on the condensed consolidated financial statements as of and for the year ended December 31, 2025. The impact of the OBBBA on future periods will depend on any related guidance issued by the U.S. Department of the Treasury and the Internal Revenue Service. The Company is in the process of evaluating the potential impact of the certain parts of this legislation that take effect in 2026 on its financial statements and related disclosures.